Skip to main content

The cost of buying a farm

There are always farms for sale.  Large estates are rare (2,500 acres), one of the larger ones in Northumberland is on the market for about £ 7,200 per acre which is just about the average land price in that region.  down in Norfolk, the price is nearer £ 8,500 per acre.

While £18 million seems a fair amount of money, it also tells you everything you need to know about UK farming.  The UK average farm size is 85 acres, and the average US farm is 450 acres.  US farms are large because large-scale mechanisation makes farming more efficient.  

I mentioned before not only field-specific use of fertilizer applicators but now, it is possible to be even more surgical and tailor application to almost every meter of the farm.   The capital cost for most farmers is prohibitive because the owner/farmer is only one accident away from bankruptcy.  Granted the UK is not the US, but food security in the UK (and Europe too) has created a system that supports small farmers and stops them from going bankrupt with a series of subsidies that keep them just above the waterline.  Food prices in the UK are high, between 20% and 40% higher than in the US.  This is a real cost to the economy, and the only way to reduce these costs is to radically improve efficiency.  

The question is why was the land price demand by this large estate the area's average.  Two reasons, (1) £ 18 million is a lot of money so the number of potential buyers is limited, (2) the real reason is that the events around Wales (SFS) are certain to spill over in neighbouring Northumberland, reducing the land value until things are settled.  

Good monday

Comments

Post a Comment

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b)...
Post a Comment
Read more

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Janet Yellen from China supporter to Hawk...

There is rarely serious news in the world these days, it seems that most newspapers are filled with headlines and little else, and then Ms Yellen went to China.  Secretary Yellen has long been known in the Biden administration as the voice of moderation when dealing with China, yet as her trip which concluded yesterday a hawk was born:  She warned the Chinese against dumping goods in the United States.    fighting words! The American administration is very concerned about the lack of Chinese domestic consumption.   Even before the COVID-19 epidemic, there were already the beginning signs of a slowdown, automobile sales were off.   China is facing domestic deflation (a clear sign of collapsing demand) China imports few consumer goods, they import raw materials and intermediary goods.   It seems that the American administration is concerned that the Chinese administration will dump consumer goods abroad to keep its manufacturing machinery ...
Post a Comment
Read more